chapter - ii review of literatureshodhganga.inflibnet.ac.in/bitstream/10603/5129/8/08... ·...
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CHAPTER - II
REVIEW OF LITERATURE
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CHAPTER- II
REVIEW OF LITERATURE
A detailed survey on research and non-research studies on various aspects
relating to dairy industry both at national and international level have been made
and from the survey relevant and selected studies are presented below as literature
review.
M. Barbosa, (1990),” Goat's Milk Research in Portugal”. This brief
paper emphasizes both the interest in producing goat's milk in countries where
conditions for producing cow's milk are unfavorable and the increasing trend noted
in recent years towards goat breeding as a basis for regional and national socio-
economic development in Portugal. In Portugal, the goat dairy sector is
characterized by emphasizing the market value of cheese. An assessment is made
of the future development of this sector at a national level, drawing attention to the
need to implement high-quality standards in production, processing and marketing.
The necessity of technical and scientific support for balanced development within
this sector justifies setting up research programs in cooperation with central and
regional units. The main research centers are referred to and a list of the recent
publications on goat's milk studies has been included.
Shrestha B, (2000) “Milk Production Dynamics and the Animal Feed
Situation in The Jhikhu Khola Watershed”. The study conducted in 1998 which
was designed to examine the positive and negative aspects of the increasing milk
production in the Jhiku Khola watershed, Nepal, and to determine possible benefits
and consequences for forestry and agriculture.
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The specific aims of the study were to: (1) determine the milk dynamics in
the watershed with an emphasis on the rate of change in milk production and milk
marketing over the past five years; (2) document milk production and sources and
supplies of feed; (3) examine the income obtained from the milk trade, women's
workload dynamics, feed demands from forests, and feed use from arable lands;
and (4) evaluate farmers' perceptions regarding milk production, and identify the
causes, coping strategies, and possible opportunities. All the animals were stall fed.
The majority of winter feed derived from crop residues, while the majority of
summer feed was fresh grass. There was a shortage of crop residues from April to
July in the spring and early monsoon, and of grass between October and May.
Women generally had sole responsibility for collecting grass from agricultural and
forested land. Men more commonly collected fodder from fodder trees on private
land, and were mainly responsible for the transportation of milk to the cooperative
centres. Farmers purchased water buffaloes in order to make money by selling
milk, but they felt that they were not able to benefit sufficiently from this activity.
They had great difficulty maintaining the buffaloes as they require special
treatment and care throughout the day. At present the chilling centre accepts only
75% of what the farmers are producing for sale. This new system is creating
hardship for many farmers because the surplus exceeds home consumption needs,
and there are limited possibilities for processing the excess milk. Suggestions have
been made that the milk be processed into other products, but at present this does
not appear to be viable because of the lack of fuel wood, poor infrastructure, poor
transportation network, and poor market access.
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Todd M. Schmit and Harry M. Kaiser (2000), “Impact of Generic
Fluid Milk and Cheese Advertising on Dairy”. Previous constant-parameter
demand models have estimated generic advertising elasticities for cheese to be
below that for fluid milk. The researchers relax this assumption, allowing for
generic advertising response to vary over time. Cheese advertising elasticities were
found below fluid milk up until the mid-1990s; average elasticities since have been
similar. A benefit-cost ratio of the farmer-funded generic advertising program was
estimated at $6.26:1 over the period of 1999-2001, indicating that generic
advertising for fluid milk and cheese continues to be a viable and worthwhile
program for milk producers.
Jacques Somda, et.al., (2001)“Characteristics and Economic Viability
of Milk Production in the Smallholder Farming Systems in the Gambia”. It is
pointed out that the domestic milk production has been for a long time hindered by
many factors including lack of interest from decision makers, distorted economic
policy and biotechnical constraints. For the last 20 years, many developing
countries have been attempting to develop the domestic milk production sector.
However, research on the basic realities and the viability status of enterprises
within this sector remain largely unproved in many developing countries. This
study focuses on the characteristic of smallholder milk producers in The Gambia.
Data were collected from 90 smallholder farm households to characterize milk
producers and evaluate the profitability and viability status of this activity. Based
on current typology of farms and gross margin analyses at farm level, the study
identified two resource-based types of smallholder farms.
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The current milk production system is surely viable. Constraints to
increased productivity include lack of improved technology at farm level and weak
institutional support. Despite the low viability status, it is shown that milk
production generates reliable incomes, which could be a departure for most
farmers to intensify farming systems, particularly in areas where no loan schemes
exist for purchasing agricultural inputs.
Karlheinz Knickel, (2001), “
The Marketing of Rhöngold Milk: An
Example of the Reconfiguration of Natural Relations with Agricultural
Production and Consumption”. As late as the first half of the 20th century, the
moderately mountainous area of the Rhön has been considered as the Armenhaus
(poor peoples home) of Germany. Relative poverty and even food scarcity have
been quite common. Physical conditions for farming are very marginal due to a
high altitude, light soils, a rather harsh climate and a short growing season. Until
the late 1980s the rate of farm abandonment and the proportion of younger people
leaving the area has been significantly higher than in most other rural areas in
Germany. In the late 1980s and particularly in the course of the 1990s, however,
the rather negative image has almost been reversed. The region is now seen in
terms of providing a model of sustainable (rural) development. This study
examines the developments in society that have led to this re-evaluation of regional
conditions. Reference is made to food quality, the reassessment of the use of
natural resources, the perception of the quality of living conditions in rural areas
and the idea of sustainability.
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It is concluded that agriculture and, more generally, the potential of rural
areas, are no longer being evaluated in monofunctional terms, and that, as a result,
more industrial forms of agricultural production have lost a substantial part of their
credibility and prestige. In contrast, the more traditional, less intensive and more
diversified forms of agriculture are now esteemed, because they tend to be better
adapted to natural conditions and because of their more favourable linkages with
an integrated development of rural areas. The final section of the study examines
the theoretical implications of the case study in terms of the reconstitution of
nature-society relations. Reference is made to the redefinition of production , the
rediscovery of the multifunctionality of agriculture, the interconnectedness in
agricultural and rural development and the active construction of synergies at farm
household, farm and regional level in rural development initiatives.
K O Osotimehin, et.al., (2001), “An Economic Analysis of Small Scale
Dairy Milk Processing In Kogi State, Nigeria”. The Nigerian dairy industry
represents an important component of the agribusiness sector of the economy with
great economic, nutritional, and social implications. This study examined the
profitability as well as operational efficiency of milk processing enterprise in Kogi
state, Nigeria. Data used to achieve this objective were obtained from 100 nomadic
households, which were randomly selected using a multi-stage sampling
procedure. Data were generated using a questionnaire as well as direct observation
(cost-route method). Descriptive statistics, budgetary analysis as well as
operational efficiency index were used to analyze the data.
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Results showed that milk processing enterprise was profitable and flexible-
A net farm income of N18, 011.20 per month was realized by an average
processor, while the fixed costs accounted for about 1% of the total costs of
processing milk into different products. It was also shown that operational
efficiency was not generally high among the processors. Based on these results,
the study advised less efficient processors to adopt the practices of the efficient
ones in order to make the enterprise more profitable.
Ashoke Kumar Ghosh and Keshav Lall Maharjan (2002), “Milk
Marketing Channels in Bangladesh: A Case Study of Three Villages from
Three Districts” This study has been undertaken to understand a general features
of milk marketing in Bangladesh and explore some of the issues on milk
production among dairy households and their conditions under various milk
marketing channels. This study highlights share of milk marketed in urban and
rural region, quality of milk and price variations under different stages of
marketing and selling spots. This study also identifies problem faced by farmers in
milk marketing and their probable solutions. It is observed that most of the dairy
farmers were small in size, their milk production low and they market the surplus
milk after consumption. However, the cooperative farmers had more cows and
were producing more milk per cow compared to non-cooperative farmers. Farmers
were following dominant marketing channels for selling major portion of their
milk according to the locations. Price fluctuation in marketing is one of the
important constraints for the small dairy farmer. The seasonal price fluctuation was
higher for both the villages of Labutalla and Tarabunia at local as well as at urban
markets. However, the cooperative price was fixed and it varied according to the
fat content of the milk.
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The average price of milk received by the dairy farmers was higher for the
Potajia, with cooperative marketing system compared to other places. It means
marketing channels of cooperative are more efficient than the other channels. The
higher and fixed price of milk would help farmers to better dairy farm planning.
The milk price is not fixed under the traditional marketing system and milk
producers frequently suffer from low price, seasonal price fluctuation and irregular
payments. Middlemen on the other hand, appropriate larger margins from milk
market often mixing fresh milk with water and powder milk. The milk quality
supplied to urban markets through middlemen was not of good standard and price
of milk varied according to different types of consumers even at the same market.
Generally, the infrastructures for milk marketing are not available in the markets.
Lack of infrastructure also damages the quality of milk. But the cooperative
provides all modern marketing facilities to their members for marketing their milk.
The milk supplied under cooperative system is hygienic and guaranteed with price
and quality. Therefore further development of dairy farming depends upon the
organized marketing channel in which farmer can get fair price. Collective
marketing like cooperative system can also reduce the transportation cost. Majority
of the dairy farmers are satisfied with cooperative marketing system. So, keeping
in mind for mass of the small producer, cooperative milk marketing system can be
developed for betterment of the rural dairy farmers.
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Leslie J. Butler, (2002) “Survey Quantifies Cost of Organic Milk
Production in California”. This study measures the cost of organic milk
production, and in particular, the differences in cost of production between organic
and conventional milk in California. Results show that the total cost of production
on a per cow and a per hundredweight basis is about 10% higher for organic
producers than for conventional producers in the surveyed regions, and about 20%
higher when compared on a statewide basis. The higher costs appear to be due to
reduced milk production, higher feed costs, higher average labor costs,
significantly higher herd replacement costs and significant transition costs. The
higher costs associated with organic milk production are exacerbated to some
extent by lower milk yields, and at the same time, are mitigated by the substitution
of lower cost pasture for higher priced roughage and concentrate feeds. The higher
prices paid for organic milk may more than offset these higher costs compared to
their regional, same-sized neighbors.
Helene Hill, and Fidelma Lynchehaun, (2002) “Organic Milk:
Attitudes and Consumption Patterns” This study considers consumer attitudes
and motivation towards organic food, and milk specifically. This is then linked to
the resulting purchase behaviour. Based on a combination of secondary and
primary research, the results indicate the dynamics between these concepts. The
resulting discussion highlights the importance of the associated internal and
external factors within this area, and their impact for marketing managers.
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Meenakshi Venkateswaran and Henry W. Kinnucan , (2003)
“Evaluating Fluid Milk Advertising in Ontario: The Importance of Functional
Form”. Generic advertising and promotion of milk and milk products have
assumed increasing importance in Canada over the past two decades. The present
research evaluates the Ontario generic fluid milk advertising campaign and
determines the functional form that best describes the response of sales to
advertising. The research also investigates whether appropriate amounts are being
spent on fluid milk advertising. Empirical results indicate the generic fluid milk
advertising program has significantly increased milk consumption. Using the
empirically preferred inverse functional form, estimate Ontario fluid milk sales to
have increased by 40 million litres during the last quarter of 1984 as a result of
increased advertising. The associated increase in farm income is estimated at $16
million, or $24 per additional media dollar invested. Results indicate that the
computed optimal spending levels are sensitive to functional form selection, and
the empirically preferred inverse form suggests fluid milk advertising expenditures
can profitably be increased to 1.7 times the current rate.
Jeremy Franks (2003) “Current Issues In Marketing Organic Milk In
The UK”. The study pointed out that the recent background to the UK market for
organic milk is reviewed to establish the background to the Organic Dairy
Production: A Sustainable Future for Organic Dairying conference held in March
2002. The presentations given at that conference are critically reviewed. Several of
arguably the most important determinants of the sustainable future of organic
dairying did not find their full expression at that conference.
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Issues largely or wholly excluded include: a priori evidence for expecting a
higher level of co-operation among organic than conventional farmers; the
distinction between “competitive pricing” and “sustainable pricing”; import
penetration and substitution, and post-conversion subsidies; utilizing innovative
information technologies to “tell the organic story”; policing organic standards and
traceability; and the ownership of the “organic label” and the number of organic
standard bodies. The importance of these issues is shown by reference to the
current market situation for organic milk in the UK. There is a need for
considerable developments in the marketing of organic milk. More distance must
be placed between associations that campaign for market growth and an
organization that will need to be appointed to take responsibility for providing
reliable and impartial market-based information.
Harry M. Kaiser, (2003), “An Analysis of Policy Alternatives to the
Dairy Price Support Program”. This study investigates the impacts of
alternative federal dairy policies on the U.S. dairy sector. In addition to the current
dairy price support program, five alternatives are investigated: (1) immediate
deregulation, (2) gradual deregulation, (3) target price-deficiency payment
program without supply control, (4) target price-deficiency payment program with
supply control, and (5) mandatory supply control. An econometric model of the
national dairy industry is used to simulate quarterly equilibrium price and quantity
values at the farm and wholesale levels for each policy over the period 1980-90.
Consumers are better off under both immediate and gradual deregulation, as well
as the target price-deficiency payment scenarios because prices are lower, enabling
them to consume more dairy products.
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Farmers, as a group, are better off under the two target price-deficiency
payment program and supply control scenarios, where milk prices and producer
surplus are highest.
Randela R. (2003), “An Economic Assessment of the Value of Cattle to
the Rural Communities in the Former Venda Region”. This study assesses the
economic value of livestock to rural communities in quantitative terms. A
quantitative valuation of livestock is assessed in terms of milk production, manure
use, draught power and offtake/sales criteria. The study is based on a cross-
sectional survey of 125 small-scale cattle farmers interviewed in the Venda region
of the Limpopo Province of South Africa. The results of the study estimated the
average total value of an adult cow to be R1 152. This value should be viewed as
an opportunity cost of the cattle. A quantitative valuation of livestock is important
in indicating the degree of impact of cattle mortalities on the livelihood of rural
households. In addition, it offers important guidelines for farmers' compensation
by the government, should a disaster occur.
Prashant Khare, H. O. Sharma And T.B. Singh1 (2003) “Marketing
Analysis Of Milk Production In Bhopal District Of Madhaya Pradesh”. In
this study the personal investigation method was adopted for the collection of
primary data. Interview schedule was prepared carefully and after pre-testing the
required data was collected by personal contact with the respondents. All possible
precautions were taken for getting the reliable information. The collected
information were also tested through cross-questioning at the time of investigation.
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The result of the study indicates that the (i) Seasonal variation was
observed in the collection of milk during the months. Milk collection was higher in
healthy season (from September to February) and lower in unhealthy season (from
March to August) Hence, efforts should be made for increasing the quantity of
milk throughout the year specially in the unhealthy season by means of giving
training to their producer members about hay and silage making. (ii) It is also
observed that in spite of more production in the month of July and August. The
producer members of the society were not in position to transport their milk due to
lack of all weather roads. Hence, efforts for developing all weather roads by
people’s participation are made. (iii) As the distance of the milk producer’s co-
operative societies increases from the dairy plant, the volume of milk collection
decreases, the milk collection was higher in those societies, which are well
connected to the dairy plant. Hence, efforts should be made to connect all the
societies lively to the dairy plant or sub centres of dairy plant to overcome this
problem. (iv) The variable cost was the main component of cost of milk production
and the maximum cost incurred in the purchase of feed and fodder and in labour
management. Hence, it is concluded that efforts should be made so that farmer’s
share some of their land in the cultivation of the fodder as the average milk
produced devoted only 0.08 and 0.03 hectare are in Kharif and Rabi respectively in
the cultivation of fodder (Barseam). (v) The charges borne by milk producer in the
collection of milk from his farm to milk producer’s co-operative society was only
Rs. 0.34 per litre in which transportation cost (51.45%) was the main component,
which can be lower down if the quantity and quality (fat%) of milk is increased by
various efforts such as training of quality milk production, feed and fodder
cultivation, by providing medical facility and opening of A.I. centre in the area.
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(vi) Producers got only 71.84 per cent share in consumers rupees, which can be
increased by reducing their cost of milk collection from producers to consumer. In
the collection of milk higest profit earned by the Dairy Plant (6.66%), followed by
milk producer’s co-operative society (2.34%) and retailer of milk distribution
(2.06%) share in the consumer’s rupees, which can also be increased of by the
quantity and quality of milk. (vii) Low price of milk the most important problems
in the collection of milk, followed by lack of cold storage, delay in payment,
inadequate water for animals, lack of all weather roads, small quantity of
marketable surplus of milk, improper treatment, lack of cross breed animals and
uncertainty of electricity. Hence, efforts should be made to solve all there
constraints. (viii) Lack of cold storage is main problems faced by milk producer’s
co-operative society followed by lack of all weather roads, private trading and
local politics. Hence, efforts should be made to solve all there constraints.
Andrew M. Karanja, (2003), “The Dairy Industry In Kenya: The Post-
Liberalization Agenda”. The research report presents an analysis of various
policy issues of concern to the dairy sub sector in Kenya. Specifically the study
focuses on analyzing the competitiveness of the various dairy production systems
in Kenya, the supply and demand of animal genetics since liberalization, the
structure and performance of the informal and formal milk markets, export and
import of dairy products, the trends in international dairy products market and the
lessons for the country. Through the supply chain analysis, the study concludes
that the emerging structure of post-liberalization dairy sector in Kenya is
characterized by lack of co-ordination between production, processing and
marketing.
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This lack of vertical co-ordination continues to impact negatively on the
performance and efficiency of the sub-sector. At production level, farmers find
themselves with milk that they cannot find dependable market outlets. The
dominant informal milk traders who have emerged after market liberalization are
also found to be ill equipped to handle milk as a perishable commodity. This has
led to heavy and unnecessary losses along the marketing chain. Milk hygiene
continues to be compromised due to lack of proper handling and transport
facilities. There is therefore real danger of milk consumers being exposed to public
health risks. Nevertheless, most consumers continue to depend on raw milk
mainly due to its low price as compared to the pasteurised milk. The market
innovations of the informal milk traders has led to shrinkage of the pasteurised
milk market which seems to lack market innovatiness to capture higher market
share. The decline in the formal milk market has led to increased consumer,
overhead costs as well as loss of competitiveness of the processed milk. The
current dairy processing structure is not only found to be fragmented but also not
ideal for export trade as well as domestic trade.
Ganesh Kumar B. and Serma Saravana Pandian A (2003), Cost of milk
production in the milk shed area of Tamil Nadu”. The study on cost of milk
production in the milk shed area of Tamil Nadu was carried out during 2000. The
total cost per indigenous cow per day was Rs 33.03, total fixed cost and total
variable cost accounting for 3.81 and 96.18% of total cost respectively. A
category-wise analysis of farmers revealed that the total cost decreased with
increase in farm size.
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The total cost per buffalo per day was Rs 53.72 and total fixed cost and
total variable cost accounted for 4.67 and 95.33%, respectively, the total cost per
crossbred cow per day was Rs 72. 86, total fixed cost and total variable cost
accounted for 7.69 and 92.31% of total cost respectively. No specific trend was
observed as far as the relationship between the total cost and category of farmers
was concerned for both buffaloes and crossbred cows. The cost of milk production
was lower in crossbred cows followed by buffaloes and indigenous cows.
B. Ganesh Kumar and Raj Vir Singh (2004) “Resource Use Efficiency
of Cow Milk Production in Tamil Nadu” A study was conducted to analyze the
input-output relationship, productivity of inputs and resource use efficiency of milk
production for local and crossbred cows using production function analysis under
rural conditions in Villupuram district of Tamil Nadu. The input data such as green
fodder, dry fodder, concentrates, human labour (both family and hired), veterinary
expenses and other miscellaneous expenses and inventory comprising milch
animals, cattle shed, stores, dairy and watering equipments, etc. and the output data
such as milk and dung were collected from selected households. The collected data
pertained to the agricultural year 1996-97. The estimated Cobb-Douglas function
explained about 72 and 70 per cent of variation in returns from milk yield of local
and crossbred cows respectively. In case of local cows, expenditures on dry fodder,
concentrates and labour were having positively significant impact on returns from
milk production. In case of crossbred cows, expenditures on dry fodder and
concentrates had positive and significant impact on returns from milk production.
One thing that appears to be surprising is that green fodder, an important dairy
input, turned out to be non-significant in milk production for both local and
crossbred cows.
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In case of local cows, the Marginal Value Product (MVPs) of dry fodder
and concentrates were significantly less than unity, signifying over utilization of
these inputs; while that of labour was observed to be significantly more than unity
indicating its underutilization. Conversely, for crossbred cows, MVPs of dry
fodder and concentrates were significantly greater than unity, indicating thereby
their underutilization in the milk production process. However, the MVPs of green
fodder and labour turned out to be statistically not different from unity, signifying
optimal use of these inputs.
R B; Dayal, Rekha (2004) “Economic Analysis of Production and
Marketing of Milk in Central Region of Uttar Pradesh” The study examines
the economics of production and marketing of milk in the state of Uttar Pradesh.
Linear and log-linear functions were used to work out the estimates of factors
affecting marketed surplus of milk both for the private and cooperative systems.
The results of the study indicate that the feed and fodder cost was the most
important item of the total maintenance cost accounting for 55 to 65 per cent of the
total cost in Zone I and 51 to 66 per cent in Zone II. The net profit per day of a
milch buffalo was very low due to the higher maintenance cost.
Ansari, S A; et.al., (2004), Cows and Buffaloes in Different Regions Of
Uttar Pradesh: A Multi-Dimensional Study . In this study an attempt has been
made to understand the regional disparity and pattern of growth of bovine
population among the different agro-climatic regions, namely, Western, Central,
Bundelkhand and Eastern region of Uttar Pradesh, based on the data for the periods
1982, 1993 and 1997.
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The analysis indicated that there are marked differences in the socio-
economic status, distribution of land, livestock, liquid and fixed assets among the
four regions. The Eastern and Bundelkhand regions are the poorest as compared to
Western and Central Regions of the state.
Yoko Kijima, (2004), “Emerging Markets in the Post-Liberalization
Period: Evidence from the Raw Milk Market in Rural Kenya”. This study
examines how the raw milk market in western and central Kenya has developed
after the dairy sector liberalization in 1992 by using panel data of 862 rural
households. From the late 1990s to 2004, the proportion of rural households who
sold milk increased from 37 to 51%. During the same period, the proportion
of
households who sold milk to traders more than doubled, while it declined from 29
to 12% for those who sold milk to dairy cooperatives. On the basis of the price
differentials between the farm gate and retail prices, the researcher find that the
functioning of the market improved between the late 1990s and 2004; in turn,
the
development of the milk market has increased the adoption of improved cows,
resulting in higher milk sales.
K. Rajendran and Samarendu Mohanty (2004) “Dairy Co-operatives
and Milk Marketing in India: Constraints and Opportunities”, in this study it
is pointed out that the Operation Flood and dairy co-operatives emerged in India
as the largest rural employment scheme, enabling the modernization of the dairy
sector to a level from where it can take off to meet not only the country’s demand
for milk and milk products but can also exploit global market opportunities. This
study reviews the existing status of milk marketing and dairy co-operatives in India
and provides recommendations to meet future challenges.
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The results of the study indicate that 80 percent of the milk produced by the
rural producer is handled by an unorganized sector and the remaining 20 percent is
handled by an organized sector. It is found that the dairy co-operatives play a vital
role in alleviating rural poverty by augmenting rural milk production and
marketing. Involvement of intermediaries; lack of bargaining power by the
producers; and lack of infrastructure facilities for collection, storage,
transportation, and processing are the major constraints which affect the prices
received by producers in milk marketing. Milk quality, product development,
infrastructure support development, and global marketing are found to be future
challenges of India’s milk marketing.
Rajendran, K. (2005), “Dairy Co-Operatives And Milk Marketing In
India: Constraints And Opportunities” This study reviews the existing status of
milk marketing and dairy co-operatives in India and provides recommendations to
meet future challenges. The results of the study indicate that 80 percent of the milk
produced by the rural producer is handled by an unorganized sector and the
remaining 20 percent is handled by an organized sector. It is found that the dairy
co-operatives play a vital role in alleviating rural poverty by augmenting rural milk
production and marketing.
Involvement of intermediaries; lack of bargaining power by the producers;
and lack of infrastructure facilities for collection, storage, transportation, and
processing are the major constraints which affect the prices received by producers
in milk marketing. Milk quality, product development, infrastructure support
development, and global marketing are found to be future challenges of India's
milk marketing.
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Nori, Michele, et.al., (2006), “Milking Drylands: The Marketing of
Camel Milk in North-east Somalia”. Increasing market integration appears to be
an unavoidable process for most pastoral societies. Raising substitution rates
between direct utilisation of animal products and consumption of cereals
exchanged through markets is the most important reason for consistent population
growth on rangelands (Helland 2000). To some extent, market exchanges are
therefore a determinant of pastoral livelihoods, especially during the dry season
when internal food production does not always satisfy households' energy
requirements. While offering potential for development, market integration of
pastoral economies also presents critical risk factors. Increasing interdependence
on regional and global political and economic environments compound pastoral
vulnerability to climatic extremes. The Milking Drylands research initiative 1
addresses these issues in one particular area of the world, Somalia. In this study,
mechanisms regulating the marketing of camel milk in north-eastern Somalia
(Region of Puntland) are analysed in order to provide relevant insights into a
society that continues to experience a lack of central government and institutional
capacities. The preliminary research findings provide some indications that
pastoral dairy marketing serves a number of economic as well as social functions,
through the exchange of a number of commodities, non-commodity services and
information, which aims to satisfy the needs of both pastoral and urban
communities.
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Kinoshita, et.al., (2006), “The Degree of Vertical and Horizontal
Competition among Dairy Cooperatives, Precessors and Retailers in Japanese
Milk Markets”. In this study, the researchers present a conceptual bilateral
oligopoly model for measuring the degree of "vertical power balance" or the
comparative degree of market power between sellers and buyers in Japan's fluid
milk market. The model also simultaneously measures the degrees of horizontal
competition among sellers, as well as horizontal competition among buyers. the
researchers estimate the model based on available data and several simplifying
assumptions, in order to illustrate how the model could be tested. The results
presented here are tentative due mainly to data constrains, but they constitute the
first economeric evidence supporting the general perception that retailers, through
they face nearly perfect horizontal competition among each other, have extremely
dominant vertical market power over fluid milk processes. Also, the results
constitute the first econometric evidence that processors may have some vertical
market power over dairy cooperatives.
Ryll, E. (2006), “The Evaluation Of Non-Marketing Premiums In
Comparison To Other Alternative Milk Marketing Policies From The Point
Of View Of Budget Policy, Consumer Policy And Welfare Economics” The
study arises from a German article on cost-benefit analysis comparison of milk
marketing systems by R. Wolffram and H. Hantelmann in Agra Europe (GFR)
(1981) 10. This explored the effects for 1981/85 of (A) continuation of an income
oriented price policy through the present intervention system with 2% annual rises
in intervention price; (B) as (A) but with a non-marketing premium of 2135 EUA
per cow, aiming to reduce cow numbers by four million or milk production by 16
mill t. (Bb similar but with a production levy);
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(C) reducing the intervention price by 5.3% per year and compensation
through income subsidies to maintain incomes at the same level as A and B (Cb
similar but with a levy); (D) a deficiency payment system and (E) a quota system
linking any price increases to the quantity produced in a base year (Eb similar with
levy). The study examines the effects of these same policies on the EC budget and
on consumer surplus and their general welfare economic effects. The detailed
conclusions are compared with those of the cost-benefit analysis and the reasons
for the conflicting conclusions are discussed in some detail.
Tanvir Ali (2006) “A Case Study of Milk Production and Marketing by
Small and Medium Scale Contract Farmers of Haleeb Foods Ltd in Pakistan”.
This case study examines Haleeb Foods Ltd. (HFL) a milk processing and
marketing company that purchase its raw milk from small and medium scale
producers. Haleeb Foods is at the forefront of product and packaging innovation. It
has achieved market leadership in several food categories with a very strong
portfolio, consisting of leading national and international brands. It is the fastest
growing packed food company in the country; in 2005, the company reported an
annual turnover of PKR7.2 billion. HFL has acquired various international quality
and environment certifications, including ISO 9001-2000, HACCP and ISO 14001
(EMC). The purpose of the study was to generate policy-relevant research and to
identify HFL’s innovative marketing practices using qualitative research
techniques. A team of three researchers was trained in qualitative data gathering
techniques and supervised by a senior researcher who gave back-up support. Key
informants were identified in several scoping visits and were interviewed in
ensuing visits.
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Observations were also conducted at milk collection centres and milk
quality testing laboratories. Field data were collected from Pakpur zone and the
main plant site of Chenab Nagar, Kasur. The main characteristic of the marketing
innovation of HFL was the exclusion of big milk contractors from the supply chain
in the late 1990s. The big contractors were used to blackmail the company on one
hand and the small-scale milk producers on the other. Therefore, the company
decided to exclude the big contractors and started a policy of self-collection. This
strategy saved the company from collapse by ensuring the sustainable involvement
of small milk producers in the market chain. Another very important aspect of
HFL’s innovation is its strict and stringent quality policy regarding the intake of
raw milk. At every Plate Heat Exchanger (PHE) plant, rigorous quality tests are
conducted to ensure that only fresh milk of the highest quality is accepted at the
plant premises. These tests have led to a reduction in milk adulteration by the
producers/suppliers and consumer confidence in HFL products is high as a result.
These and other evolutions in the supply chain have led to the sustained inclusion
of small farmers. The establishment of quality standards has ensured better
marketing of the processed milk. The smallholders have had no problem selling
milk, receiving a higher price for it than from other milk processing companies and
they are now safe from blackmailing by big contractors who also paid less money
per unit milk. On the other hand, inclusion is not very appreciable if examined
from the point of view of any backward or forward linkages. The company does
not provide any technical or other assistance to the farmers, especially the small
farmers. This has a serious limiting affect on the growth of small farmers, as they
seem destined to remain small subsistence farmers with no chance to rise up the
supply chain.
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Also, farmers are still potentially vulnerable to unfair or fraudulence
behaviour from the independent middlemen who collect the milk from the farm
gate. For example, although HFL pays its agents and contractors in advance for
milk supplied, these middlemen sometimes only pay the farmers a fortnight after
delivery. Another serious issue is the absence of any formal or even informal
farmers’ organization, such as a milk producers association. Across most other
major dairy producing countries, dairy farmers are organized into their own
associations, which support farmer training and management, enable investment in
infrastructure and provide support services. Due to the absence of any such
association, farmers are unable to bargain collectively with the HFL or any other
company procuring milk from their area. In conclusion, it was found that although
milk production systems prevailing in Pakistan were plagued by lower milk yields,
they offered immense potential for growth. Changes in animal management and
basic animal feeding practices, especially by small dairy farmers, could
substantially increase milk yields. Sustained effort on the part of the government
and the private sector is needed to improve animal stocks and feed, management
practices, and production technologies in order to harness the immense potential of
this important livestock sector, in view of its contribution to GDP. Private
companies engaged in milk collection and procession could help farmers to:
upgrade supply chains by facilitating investment in chilling tanks for purchasing
and collecting of milk, which would give farmers a guaranteed sale for quality
milk; improve the quality of feed to ensure a better quality of milk in the form of
advances tied to procurement of better feed; and demonstrate the health and safety
problems associated with poor quality milk that would increase the potential sale
of processed milk and milk products.
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The government could: improve and enforce existing food safety standards
in line with international standards; provide practical training to farmers on modern
farming practices; raise capacity of training institutions to provide required training
and qualifications; and investigate modern technologies, systems, and underlying
seasonal economics of dairy production to better inform investment decisions and
correct market distortions. Finally, on a social level, attempts to enhance
production of smallholder dairying are important not only for raising milk yield in
the country but could also become an effective tool for raising income levels of
impoverished rural households. Successful interventions in this type of dairy farm
could be the key to alleviating poverty in rural areas.
Oghaiki Asaah Ndambi, (2007),” Milk Production Systems in Central
Uganda: A Farm Economic Analysis”. The Ugandan dairy sector is developing
rapidly over recent years and is dominated by small-scale farmers owning more
than 90 percent of the national cattle population. Due to market forces and higher
competition for production factors, milk production systems are intensifying,
necessitating proper understanding of the new production tendencies. Three
intensive and four extensive production systems were identified and analyzed,
using TIPI-CAL (Technology Impact Policy Impact Calculations model). The
results show that the production systems are very different in many respects but
share similar development trends. Whereas intensive systems use graded animals
and invest heavily into feeding, buildings and machinery, extensive systems use
local breeds and invest minimally. Total cost of milk production falls with
increasing herd size, while dairy returns vary among farms from 18 to 35
USD/100 Kg of milk.
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All systems make an economic profit, except the intensive one-cow farm,
which heavily employs family resources in dairying. Due to better management of
resources and access to inputs and markets, dairy farming closer to urban areas and
using improved breeds is highly profitable, especially with larger herd sizes.
Stakeholders should favour such practices as well as others which can improve
productivity, especially in African countries where traditional systems dominate
dairying.
Verma, A R, (2007), “Economics of Production, Marketing and
Constraints of Buffalo Milk in Indore District of Madhya Pradesh”. An
attempt has been made in the study to analyze the economics of production,
marketing and constraints of buffalo milk in Indore district of Madhya Pradesh. It
examines the cost and returns per year, the net return, cost of milk production per
litre, benefit-cost ratio, evaluate the resource use efficiency, price spread and
marketing efficiency of small, medium and large size-groups of buffalo farms.
Multistage stratified sampling method was used for the selection of the ultimate
unit of the sample.
Diansheng Dong, (2007), “Modelling Milk Purchasing Behaviour with
a Panel Data Double-Hurdle Model”. In this study, the double-hurdle model
typically used in cross-sectional data is extended to panel data structures. The new
double-hurdle model can account not only for the censored nature of commodity
purchases, but also for the dynamics of the purchase process. In this model, a
flexible error structure is assumed to account for state dependence and household-
specific heterogeneity.
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In the empirical application for milk purchases, it is found that generic
advertising increases the probability of market participation as well as the purchase
quantity and incidence. Temporal dependence is also found in both purchase and
participation equations.
Sertac Gonenc, Erkan Rehber, (2007) “Privatization in Agro-Food
Sector: The Case of Turkish Dairy Industry”. This study aims to focus on the
issue of privatization movement in the agro-food sector, in the light of the Turkish
Dairy Industry Enterprises (TSEK) case, and the effects on the sector following
privatization. In order to make an appropriate evaluation, the background of the
privatization movement and the general structure of the dairy sector in Turkey are
examined first. After a brief evaluation, the privatization process of TSEK and its
effects on the sector are discussed in the light of the results of empirical data that
obtain from the ANOVA model. It has been concluded that the liberalization
process has been adopted without the setting up of market regulatory policies, thus,
the price balance in the dairy sector has changed to the disadvantage of both
producers and consumers, while market concentration has increased and regional
differentials have become more apparent. ]
Hasan Cicek and Murat Tandogan, (2008) “Economic Analysis Of
Dairy Cattle Activity In Afyonkarahisar Province”. The purpose of this
research was to determine dairy enterprise’s production activities by doing
economic analysis and economical principle how can redeem under present
economical conditions in enterprises in Afyonkarahisar.
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According to the finding results, cost factors, include firstly 47.82% feed,
after 26.97% labor, 7.84% amortization, 7.28% other costs (energy + liquid fuel +
liability capital interest + other current costs), 4.25% vets and meds, 3.25% repair
and maintenance, 2.59% general management costs. Average income distribution
observed in these enterprises were as follows; milk sales, change of inventory
value, calf revenues, 52.68%, 40.83% and 6.49% respectively. In the enterprises, it
was founded that average financial profitability is -3.77%, economic profitability is
-3.56% and profitability factor is -22.40%. Returns to scale was 0.99.
Ayenew, Y.A, et.al., (2009), “Handling, Processing And Marketing Of
Milk In The North Western Ethiopian Highlands” In order to describe the ways
of handling, processing and marketing of milk in urban and peri-urban production
systems of the North western Ethiopian highlands, 256 and 54 dairy farms were
selected for survey and monitoring data collection, respectively. Due to poor
market access and high transaction costs and the perishable nature of raw milk, the
amount of sold milk (products) and prices were significantly lower for peri-urban
producers. Prices were also low during fasting periods and during the wet season;
when milk production was reactively high. Traditional ways of milk processing at
household level include practices which may contain risks for product quality
affecting consumers’ health. Providing basic handling and health education for
producers therefore is likely to result in improved milk (product) quality on the
markets. Direct delivery to the nearby consumers was the largest primary milk
outlet for producers of both systems, while retailers and milk cooperatives were the
second most common outlets for the urban and the peri-urban system, respectively.
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Therefore, to enhance dairy production and marketing, milk co-operatives
that could be able to market larger volumes and sufficiently reduce transaction
costs should be supported by governmental and non-governmental organizations
through providing technical and infrastructural support.
Ellis, K.A, (2009) “Public Opinion on UK Milk Marketing and Dairy
Cow Welfare”. Interview questionnaires were administered to the general public
in central Scotland and northern England during summer 2007 to investigate
consumer awareness of UK dairy production methods, welfare issues and
recognition of 'quality assurance' product logos. Fifty percent of respondents gave
UK dairy animal welfare a positive rating. Recognition of individual quality
assurance logos was poor and 75% of respondents stated that they did not
intentionally seek to buy products with any of the logos. Respondents' perceptions
of good dairy welfare included: appropriate feeding, good stockmanship, plenty of
space, freedom to roam/free range and environmental cleanliness. Half of
respondents felt they were poorly informed about food production and the majority
of respondents (68%) would like more information on food production.
Respondents believed that information on animal welfare provided by veterinarians
and farmers would be reliable. Most respondents (93%) said they would pay more
for good dairy welfare. The findings show that the general public are interested in
animal welfare but could be better informed on dairy animal production and
welfare. Veterinarians and farmers may have a potentially important role in
providing this information with increasing demand for higher welfare provenance
products potentially helping to improve animal welfare.
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Sekar Murugan (2009), “A Study on the Marketing Practices of the
Kovilpatti Co-Operative Milk Supply Society Ltd”. The objectives of the study
are to review the structure and functions of the Co-operative milk supply society,
to find out the existing marketing practices and to identify the problems which it
has to face in the marketing of milk, to analyze the cost structure involved in the
pricing of milk, to assess the functioning of the society from the consumers point
of view, to offer suitable solutions to overcome the problems identified.
The major findings of the study include, As far as the Kovilpatti Co-
operative milk supply society is concerned, the management is vested with a board,
which consists of nine members elected by the general body as per the election
procedures. In addition to the procurement and sale of milk, making arrangements
with the nationalized banks for issuing loans to members. Selling green fodder to
its members at subsidized prices and providing employment are the other functions
of the society. The current study has given due importance to the marketing
practices of the society. At present, the society procures milk both from its
members and the chilling centre in order to meet the demand and requirements of
the consumers in Kovilpatti. A careful analysis of the selling price shows that the
price has increased from Rs. 12.00 in 2005-2007 to Rs19.00 in 2007-2008, thus
representing an increase of Rs 7.00. On personal enquiry, it was found that it is due
to the fact that the rate charged by the chilling centres has considerably increased
during that period. The pricing policy of the society is divided into two stages,
namely policy regarding purchase price and selling price. Regarding the purchase
policy, it is found that the society is following the two axis pricing system for its
procurement from the members.
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Under this system, the society is making payment on the basis of Fat &
SNF contents in the procured milk. Regarding the sales policy, it is found that the
society is not having any scientific policy, it is found that the society is not having
any scientific policy. All the costs incurred are not independently and scientifically
maintained by the society. Hence, an attempt has been made by the researcher to
find out the actual cost on scientific lines by adopting the single or unit output
costing. The researcher suggested that in order to increase the numbers of milking
members and to procure more milk from members. It is suggested that the area of
operation of the society shall be extended to a radius of at least 12 kms. It is also
recommended that the society shall make their procurement rates known to all
residing in the area of operation so as to attract more suppliers of private dealers
and thereby achieve the target of the required number of milking members. In
order to tackle out the problems related to the payment of high price to the chilling
centers, it is advised that the society shall take efforts to take payment on the basis
of the Fat and SNF contents so that the society can have an effective control over
its procurement price. Again, the study suggests that the society shall try to supply
milk according to the convenience of consumers also by introducing some
flexibility in their distribution time schedule. Regarding the reduction in price of
milk the present study would like to suggest that the society shall try to reduce its
existing price at least by a very small margin since the price reduction has much
impact on the level of their purchases. The Success of any business depends on the
attitude and preferences of the consumers.
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A survey of the various studies on the dairy industry in India reveals that
research study on the economic analysis of production and marketing of cow and
buffalo milk in Madurai district of Tamilnadu is not yet attempted. The present
study Economic Analysis of Production and Marketing of Milk in Tamil Nadu
(With Special Reference to Co-Operative Milk Producers’ Union Ltd, Madurai
District) attempts to fill the research gap. The study focuses mainly on the cost
and returns structure of milk production, existing distribution and marketing
system of Madurai District Co-operative Milk Producers’ Union Ltd, and
constraints faced by the milk producers and the Madurai District Co-operative
Milk Producers’ Union Ltd,. It is excepted that the results of the study may have
practical utility on the dairy industry in Madurai District for improving milk
production especially in the global competitive scenario.